Duke Energy Corporation (DUK - Free Report) announced that it will pay $6 million to settle the case in connection with the 2014 coal ash spill and other water quality violations at the shuttered Dan River coal plant.
A fine of $6.8 million was imposed on the company by the Department of Environmental Quality (DEQ) this February. However Duke Energy made an appeal against the imposed fine and claimed it was “grossly out of proportion to the way in which the DEQ has treated similar violations by other entities in the past.” Nevertheless, the company has agreed to pay a fine that is 12% lower than the original amount ordered by the DEQ.
In Feb 2014, coal ash, along with 27 million gallons of contaminated water, spilled into Dan River near North Carolina from Duke Energy’s coal ash ponds. Coal ash is a toxic waste produced during electricity generation in power plants. The fine was imposed on Duke Energy after two years of the spill.
The imposition of a fine and the subsequent appeal were followed the two parties reaching a settlement. It was mutually agreed that it was in both the parties’ best interests to avoid an expensive prolonged litigation process and work on an amicable solution instead.
Duke Energy and the DEQ had agreed, as part of the settlement, to not make any public statements about the settlement.
Duke Energy to Focus on Operations
With the settlement of the ash spill case, Duke Energy can now concentrate solely on its capital projects and move ahead with its plans to invest about $25 billion to $30 billion in growth projects over the 2016–2020 time frame. The company is focused on increasing the share of renewable resources in its generation mix.
In Apr 2016, Duke Energy raised its 2020 renewable energy goal by 33% on the back of continued growth in its clean energy infrastructure. The company expects to own or acquire 8,000 megawatts (MW) of wind, solar and biomass capacity by 2020.
Zacks Rank & Key Picks
Duke Energy currently has a Zacks Rank #2 (Buy). Other favorably placed stocks in the utility industry are Spark Energy, Inc. (SPKE - Free Report) , Korea Electric Power Corporation (KEP - Free Report) and DTE Energy (DTE - Free Report) . Spark Energy and Korea Electric Power sport a Zacks Rank #1 (Strong Buy), while DTE Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Spark Energy’s earnings estimates witnessed an increase of 12.2% and 4.5% to $2.49 for 2016 and $3.02 for 2017, respectively, over the last 60 days.
Korea Electric Power’s earnings estimates saw an increase of a respective 3.7% and 10.9% to $5.02 for 2016 and $5.30 for 2017 over the last 60 days.
DTE Energy witnessed an increase of a respective 2.2% and 0.2% in its earnings estimates to $5.06 for 2016 and $5.25 for 2017 over the last 60 days.
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